The movie begins in Earth orbit, with Superman saving a group of cosmonauts whose ship has been thrown off course by a rogue satellite. Shortly after, his alter ego, Clark Kent visits his hometown of Smallville to check on the now uninhabited family farm where he grew up. Venturing into one of the empty barns, he uncovers the hidden space-capsule he was sent to Earth in as a baby, and removes from it a green-glowing, Kryptonian energy module. A voice recording left by his birth mother, Lara, states that its power can be used only once.

Unwilling to sell the family land to a local developer, Clark returns to Metropolis and transforms into Superman in order to stop a runaway subway train after its driver suddenly loses consciousness while at the controls. Returning to the Daily Planet as the reporter, Clark Kent, he learns that the once great metropolitan newspaper has been taken over by David Warfield, a tabloid tycoon who promptly fires Perry White and hires his daughter Lacy Warfield as the new editor. Lacy very soon takes a liking to Clark, and does her best to seduce him, by asking him to come to her office while she is lying on her desk revealing, despite Lois' advice that Clark will most likely not reciprocate her less-than-subtle advances. Though, as a result of her persistence, Clark eventually agrees to go on a date with her.

Following the news that the United States and the Soviet Union may soon engage in nuclear war, Clark is conflicted with regard to how far he as Superman can intervene. After receiving a heartfelt letter written by a concerned schoolboy, Superman travels to the North Pole, where he seeks advice from the spirits of his Kryptonian ancestors at the Fortress of Solitude. Rather than interfere in such human matters, they recommend he leave Earth and find a new world where war is long forgotten.

After indulging in a flight of fancy with Lois where he asks her advice on the matter, Clark's mind is made up. At a meeting of the United Nations, as Superman, he tells the assembly that he is going to rid the Earth of all nuclear weapons. An undisclosed amount of time later, Superman has collected almost the world's entire nuclear stockpile in a gigantic net he holds in high Earth orbit. On closing the net, he promptly hurls it into the sun, destroying the warheads and thereby eradicating the threat they once posed to the planet he has sworn to protect.

Meanwhile, Lenny Luthor helps break uncle, Lex Luthor out of prison with the aid of a deadly, remote control automobile. On returning to Metropolis, the pair steal a strand of Superman's hair that he donated to a museum, and use it to create a genetic matrix which they later attach onto one of the few, remaining American nuclear missiles. After the missile is test fired on Luthor's command, the ever-vigilant Superman intercepts the missile and throws it into the sun like all the others.

As the missile is soon enveloped by the star's intense heat and radiation, a glowing ball of energy is discharged which rapidly develops into a space-born super-human. This "Nuclear Man" then makes his way back to Earth to find his "father," Luthor, who establishes that while his "son" is indeed powerful, he will deactivate if isolated from the sun's rays or suitably bright artificial light - as in the Greek legend of Antaeus; a wrestler whose strength came solely from his bodily contact with the Earth.

A worldwide battle ensues between Luthor's creation and the Man of Steel. After successfully saving people from all over the globe from the clutches of Luthor's manically monstrous creation, Superman is forced to save the Statue of Liberty from falling onto the crowded city streets below - during which time, he becomes poisoned as a result of a vicious scratch from Nuclear Man's deadly, radioactive fingernails. Nuclear Man then kicks his mortally wounded opponent into the distance with such strength, that his trademark red cape is torn away.

To Lois' disgust, "The Daily Planet,' now reformatted as a tabloid newspaper, publishes the headline, "Superman is dead." Lois indicates a desire to quit, and seizes Superman's recovered cape for herself. Also distressed at the headline (her father's idea), Lacy reveals to Lois that she genuinely cares for Clark and asks if she knows where he is. Saying nothing, Lois ventures to Clark's apartment where she proclaims her undying love for Superman. Felled by radiation sickness, Clark staggers weakly to his terrace, where he retrieves the last benevolent Kryptonian energy crystal in a last-chance bid to heal himself.

Having developed a sudden crush on Lacy, Nuclear Man threatens mayhem if he is not introduced to her. The newly-restored Superman eventually agrees to take him to her in order to prevent anyone else from being hurt. In an attempt to disable the villain, Superman cunningly lures Nuclear Man into an elevator located inside one of Metropolis's many skyscrapers, trapping him within it and then depositing him on the dark side of the moon. Not having realized the elevator doors have been left slightly ajar, as the sun rises, Nuclear Man breaks out of his makeshift prison and Superman is forced once again to defend himself, this time on the moon's surface. At the end of the battle, it appears as though Superman has been defeated once again, and he is driven into the ground like a stake by his increasingly barbaric opponent.

Lacy directly protests her father's sensationalist headlines, warning him that his irresponsible stories are dangerous, and that newspapers are supposed to be about journalism. She is instantly proven right, as Nuclear Man, having developed a barbaric crush on Lacy, immediately kidnaps her and spirits her away. Meanwhile, Superman claws his way out of the thick moon dust, and pushes the moon out of its natural orbit, casting Earth into a solar eclipse which temporarily nullifies Nuclear Man's powers and life-force. Rescuing Lacy from Nuclear Man's arms, he safely returns her back to Earth, before recovering Nuclear Man and depositing him into the core of a nuclear power plant, where he becomes a plentiful energy source. Superman also recovers the fleeing Luthors - returning Lex to prison, and Lenny to Boys Town.

Perry White restores the previous Daily Planet decorations, much to Warfield's annoyance. It is revealed that during his absence, White has been busy securing a loan with which to buy back the controlling shares of the newspaper, thereby making Warfield a minority shareholder and protecting it from any further abuse. With Perry White now the practical owner, the Daily Planet can return to being a more respectable publication, much to the relief of Lois and Jimmy.

Later, in a press conference, Superman declares only partial victory in his peace campaign, saying "There will be peace when the people of the world want it so badly, that their governments will have no choice but to give it to them." He then flies into space, smiling optimistically.

The movie was not well received by either the general public or film critics. The review aggregator Rotten Tomatoes reported that 11% of critics gave the film positive reviews, based on 28 reviews. Some critics considered the film to be one of the worst of its year. The movie suffered from poor sound and visual effects, believed to be caused by Cannon using much of the film's intended budget on their other projects. Reportedly, Warner Bros. gave Cannon approximately $40 million to produce Superman IV but in the end, Cannon used only $17 million for Superman IV.

The film was released July 24, 1987 in the United States and Canada and grossed $5.6 million in 1,511 theaters its opening weekend, ranking #4 at the box office. It grossed a total of $15.6 million in the United States and Canada.

Of the four Superman films starring Reeve, this one fared the worst at the box office, and the series, as it turned out, went dormant for 19 years. Reeve himself admitted that both this and the third installment were very poor and did not live up to the potential that had been established by the first two films, and his 1995 paralysis made the development of any further sequels involving him in the starring role impossible. Time Warner let the Superman feature film franchise go undeveloped until the late-1990s when a variety of proposals were considered, including several that would reboot the franchise altogether with substantially different versions of the characters and setting, rather than attempt to follow up on this film.

The film ended with the prophetic final line, "See you in twenty,". In fact, it would be 19 years before the next Superman film, Superman Returns, would arrive at cinemas in June 2006. This film discarded the events of Superman III and IV, continuing where the first two installments left off, although most of Richard Lester's concepts in Superman II are jettisoned as well.